The UK must lead on global finance

Making the World Green with Envy

Earlier this month, London hosted the second annual Green Finance Summit. Green finance, which involves investing in more sustainable products, is yet one more way the UK has potential to set a global benchmark.

The summit, brought together more than 700 delegates from the realms of business, government, and regulation to discuss how green finance can be grown in London, the world’s most dynamic and international financial centre.

Green finance is already growing rapidly across the world, with green bond issuances up from $87bn in 2016 to $155bn last year, and is expected to reach more than $250bn this year.

Globally more than $90 trillion in investment will be needed by 2030 to achieve sustainable development and climate objectives. This represents a huge opportunity for London as we move beyond Brexit and we must be willing to seize this opportunity.

London is already a leading centre for infrastructure finance. There are more than 250 foreign banks based here, as well as a huge number of large institutional investors with assets under management of more than $100bn available to be deployed globally.

The UK is also the largest centre for asset management in Europe. We manage more capital than the next three largest European countries put together.

This private equity is matched by funds and companies listed on the London Stock Exchange, where more than 480 infrastructure related companies are listed with operations in over 65 countries.

This capital, available for shovel-ready projects across the world, puts London in pole position as the place in which to source outside investment in projects.

Tackling the impending challenges of climate change can be done in a vast array of ways. We have already seen the  Chancellor Philip Hammond announce that a new Green Finance Institute, will be set up in conjunction between the City of London Corporation and the Treasury.

This body will drive forward the UK’s green finance market and play a vital role in Britain’s international engagement on financial services, especially in emerging markets where green finance demands are growing rapidly.

The London Stock Exchange is currently home to 78 green bonds which have raised over $24.5bn, and we are currently ranked top in Z Yen’s Global Green Finance Index for penetration and quality, establishing a strong platform for future growth in this area.

No country is better placed to lead the world in both economics and sustainability. Further investment into green financing strategies will benefit not just the Square Mile, but the world as a whole, and future generations still to come.